On
12 December 2002, the General Council approved a new budget which
includes salary adjustments and a commitment to further work on a more
permanent method of calculating salaries. Chairperson Sergio Marchi
described elements of “an objective and credible process” for
achieving a fair outcome.

General
Council chairperson’s statement on Budget, Finance and
Administration Committee report

On
behalf of the entire WTO membership, let me extend my appreciation and
compliments for the hard work that the Chairman and members of the
Budget Committee, together with the Secretariat, have put into this
report.

As
in many administrations, the budget cycle involves a very concentrated
period of work involving matters of complexity and sensitivity. In
this regard, I know many Members think it would be helpful to work
towards a more long-term budgetary planning process, which could
encompass broader considerations and aid a smoother handling of the
work.

Concerning
the elements in the report dealing with Secretariat staff salaries and
allowances, I have had some consultations with the Director-General,
with members, and with representatives of the Staff Council. I should
underline that these consultations have been marked by a positive and
constructive spirit on all sides. I know it is widely recognized that,
while the WTO is a member-driven organization, a close partnership
between Members and the Secretariat has always been essential to its
success and will remain so in the future.

The
General Council will take a decision today on the overall budget and
its components. The proposed increase of 8.3% over last year
represents a considerable effort by Members. At the same time, I am
confident that we will all continue to receive a very good return on
our investment in this organization, at this crucial stage in its
life.

As
Members are aware, the budget provisions include a salary adjustment
for the Secretariat of 4%; 3% awarded on January 1, 2003 and the
remaining 1% on July 1, 2003. The Budget Committee has also
recommended such further adjustment as is necessary to restore parity
with the UN Common System. In addition, the Committee recommends that
it carry out a review of the methodologies for future pay adjustments,
to be completed by March 31, 2003.

In
reviewing these methodologies, the Committee will have to undertake a
very important task in a rather short time. We all have an interest in
an objective and credible process which produces a fair outcome. To
help guide the Committee's work, the following elements should be
taken into account:

(a)
The work should begin as soon as possible in the new year and the
recommendations which result from it should be forwarded to the
General Council no later than 31 March 2003. In addition, the
Committee is requested to make a progress report to the General
Council, at its meeting on 10/11 February 2003;

(b)
To assist the Committee, appropriate opportunity should be given to
the Secretariat staff to be fully consulted and to express their
views;

(c)
In developing methodologies, the Committee should aim to provide WTO
staff salaries, benefits and other conditions that are sufficiently
competitive internationally to attract and retain a highly skilled
and motivated staff;

(d)
To enhance the predictability of the remuneration system, the
methodologies that result from the Committee's work should be
implemented fully and in good faith by all concerned;

(e)
In order to ensure a smoother evolution in salary levels and
facilitate overall budgetary planning for Members, salary
adjustments based on the agreed methodology should be made on an
annual basis.

I
believe that these elements will help the Committee to arrive at a
remuneration system which will be equitable and forward looking. I
know I speak for all Members when I say that we look forward to seeing
this work on salary review methodology carried out in a way which
reinforces partnership and mutual respect. And I say this in the
knowledge that the membership and the secretariat staff are united in
their commitment to this organization and what it stands for.

The
consensus on the budget is welcome and necessary. I would like to
highlight my appreciation for the work and efforts of the Chairman of
the Budget Committee, Mr. Neil McMillan.

I
also fully appreciate the efforts of delegations who have, despite the
prevailing climate of financial stringency, taken into account to the
maximum extent possible the wider context of our human resources
needs, even if it was not possible to meet in full what we had asked
for as a reasonable increase.

Mr
Chairman, I am particularly grateful to you for your own active and
constructive influence on the budget discussions. The statement which
you made just now complements in a very useful way the recommendations
of the Budget Committee.

I
will do my best to ensure that the resources made available to the
Secretariat will be optimally used, in particular for work related to
the DDA. It will be a challenge to manage this workload up to and
beyond Cancún.

I
note the interim measures agreed by the Budget Committee which will
allow WTO Secretariat pay to catch up with UN rates by, at the latest,
1st July next year. Now that the UN pay increases for professional
staff have been decided, we will discuss with Members how to factor
that into the Committee's package.

Interim
measures, by definition, are not intended to solve the whole set of
problems which have arisen following the 1998 decision to take the WTO
out of the UN Common System and to set up a fully independent
Organization.

The
methodology review, which is to be completed by 31st March next year,
will be a vitally important next step. I cannot emphasize strongly
enough the importance of an agreed-upon methodology in settling the
terms and conditions of employment for the Secretariat. A reasonable
outcome that reflects the value Members place on a highly trained and
internationally recruited staff is the best way to forestall future
problems. I look forward to working closely with the Members in that
process; to defining objective criteria and parameters for the review;
to determining future pay scales; and to setting up a system for more
regular, annual adjustments.

I
noted and welcomed, Mr Chairman, some helpful references in your
statement to various aspects of the methodology review. I look forward
to the progress report which will be made to the General Council at
its next meeting in February.

As
you know, many of our staff feel – I think with some justification
— that there has been a tendency in recent years for the Members to
demand greatly increased output for modestly increased input. We must
all recognise that this approach ultimately has its limits.

I
have considerable sympathy with a number of the issues raised by the
staff. We do need more resources overall. We do need to attract and
retain high quality staff. We surely should by now have already had a
settled and equitable mechanism to adjust salaries regularly. It is
certainly not the best budget practice – and it is certainly
inappropriate human resource practice — to rely so heavily from year
to year on temporary assistance to perform work which is of a
permanent nature.

Having
said this, as the person responsible for making sure that the
Secretariat carries out the Members' directions in an efficient
manner, I have always — and will continue — to call for moderation and
discussion. In particular, the DDA cannot be put at risk. Next year we
face important deadlines and a vital Ministerial Conference. I also
have to recognise, as I have already said, that the Members have their
own constraints.

I
believe that at this stage we should all be forward-looking. Let us
all concentrate now on carrying out the Budget Committee's
recommendations — as complemented by your statement, Mr Chairman —
adding substance as we go along to the various important tasks set out
for next year.

As
we have discussed previously, Mr. Chairman, and as you implied in your
important statement, this annual, ad hoc, bargaining exercise which we
call the budget is no longer good enough for an Organization as
important as this one now is. There should be more planning and
strategic thinking for the future. That way, both the Secretariat and
Members will have greater predictability and fewer surprises.

The WTO stands at a cross-roads. Since the conclusion of the
Uruguay Round, the Secretariat has responded with commitment and
energy to the many demands placed upon it by Members. Indeed, since
1999 alone, workload has increased by around 30%. Today, we are in the
early stages of a new Round, and Members will expect much from the
Secretariat as these negotiations proceed towards Cancun, and beyond.

However, a serious structural imbalance in the staffing of the
Secretariat has emerged. In the last few years, the increase in
Members' demands has far exceeded the human resources Members have
provided. Further, to attempt to tackle the increase in workload,
Members have created, in the Secretariat, an unhealthy reliance upon
temporary assistance to perform work which is permanent in character.

The recommendation by the Budget Committee to provide only 6 new
posts, instead of the 12 the Director-General requested, does not even
begin to address the structural imbalance. Far less will the problem
be solved by re-allocating existing posts because shifting already
stretched resources will not alleviate the pressure on staff. Indeed,
re-allocation of existing staff will have an inevitable impact on the
level of service the Secretariat can provide Members. Similarly,
failing to budget the sums spent last year on temporary assistance
also sends a curious message in a Ministerial year, when workload is
likely to be higher.

In short, none of these recommendations by the Budget Committee
will address the underlying concerns of staff that the Secretariat
does not have adequate human resources to provide the quantity and
quality of work Members expect to receive. The staff is disappointed
by the makeshift approach that the Budget Committee has adopted to
resolve these important issues.

This year is also the first time that the Director-General conducts
a pay review under the WTO staff regulations. The Budget Committee has
rejected the perfectly reasonable methodology presented by the
Director-General, but offers no alternative methodology in its place.
In the absence of an objective, stable and clear methodology
underlying the recommended interim measures, these recommendations are
not consistent with the case-law of the ILO Tribunal.

The staff is extremely disappointed that the Budget Committee's pay
recommendations fall far short of the Director-General's original
proposal for an 8% adjustment. This adjustment is needed, today, to
restore WTO pay to competitive levels.

The recommended interim measure is to “restore parity”,
on a grade-by-grade basis, with the UN, for all staff. Yet, just three
years ago, Members established an independent WTO secretariat, with
its own staff rules. These rules contain an explicit rejection of the
UN common system of pay and benefits. It is incomprehensible to staff
that Members should seek now to re-apply the UN rules to staff. The
message is that there is no independent WTO Secretariat, applying its
own rules.

In practice, restoring UN parity for all staff would be extremely
difficult. The WTO has a different system of benefits. The UN has some
benefits we do not have, and the level of other benefits is different
at the UN. Parity for all staff can only be achieved by applying the
UN compensation rules to each WTO staff member. This cannot be
consistent with an independent Secretariat.

Even though, in law, it is for the Director-General to decide and
apply a methodology this year, the Budget Committee has recommended
that a methodology be agreed next year, and applied the year after.

Besides failing to respect the deadlines in the staff regulations,
the recommendation of the Budget Committee on the methodology gives
undue prominence to the UN system. However, in other key areas, the
recommendation is too vague. We have waited many years for vague
language to be converted into concrete results. This year, we have
watched the Budget Committee reject a good pay study for no good
reason. This causes great concern to the staff as we work towards the
adoption of a methodology for the future.

The staff urges the General Council to provide concrete parameters
for the discussions on the methodology through the adoption of a set
of guiding principles:

The General Council should state that the methodology will
compare WTO pay with pay at other international organisations
doing comparable work—not just the UN.

The General Council should state that the methodology will be applied
annually and the results implemented automatically.

The General Council should call for the methodology to be applied
in 2003, instead of trying to achieve parity with a different
organisation, applying different rules. By applying the
methodology in 2003, Members will ensure that WTO pay is
determined according to WTO rules.

The General Council should also recognise theimportant
role of the Director-General and the legitimate role of the staff
in developing the new methodology.

The WTO stands at a crossroads. We, the staff, want Members to
understand our profound commitment to the success of the WTO and the
objectives of Members' common undertaking. We try, at all times, to be
a committed and highly motivated work-force. But we hope that Members
now see the need to affirm their commitment to staff and to build upon
the institutional foundations of the WTO.